California leads the nation in restricting the kinds of workers validly classified as independent contractors/“non-employees.”  See, e.g., California’s Independent Contractors – An Endangered Species by Newly Enacted “AB 5” (October 4, 2019).

Los Angeles has now gone further, directing that many contracts for freelance services within its city limits must be in writing. This “Freelance Worker Protection Ordinance” provides for recovery of the contract’s or labor’s value, double damages for failure to pay on time, and attorney fees.

A “Freelance Worker” is an individual or entity composed of no more than one person hired to provide services in the city for compensation. A Freelance Worker has no employees. A “Hiring Entity” is regularly engaged in business or commercial activity (including non-profits), with exception for those hiring “app-based transportation and delivery drivers to provide prearranged services.”

The ordinance covers work performed for the Hiring Entity on or after July 1, 2023 valued at $600-plus either by an individual job or cumulative jobs in a calendar year.

The contract must contain: ● name, mailing address, phone number, and, if available, email address of each party; ● itemization of all services to be provided, their value and rate and method of compensation; and ● the payment date or how that date will be determined.  If the contract does not specify the due date, payment must be made within 30 days after the services are delivered.

Any Freelance Worker waiver of the ordinance’s requirements “shall be deemed contrary to public policy and shall be void and unenforceable.”

The Hiring Entity may not retaliate against a Freelance Worker asserting rights under the ordinance.

A Freelance Worker may complain to the city’s  Office of Wage Standards and/or file suit to enforce the ordinance or recover damages and attorney fees.  Those damages may include: ● “the value of the contract or the work performed, whichever is greater”; ● up to twice the amount not paid by the due date; and ● an additional $250 for Hiring Entity refusal to provide a requested written contract.

Take-Away:  In addition to validly classifying workers as independents by this state’s highly constrictive standards, businesses must take care to confirm in writing — and to timely pay on — even one-event or single “gig” one-person services performed within L.A. city.

For further information, please contact Tim Bowles, Cindy Bamforth or Helena Kobrin.

See also:

• Preference Doesn’t Matter Incorrect Classification Leads to Massive Liability  (May 5, 2023)
• Cautionary Tale Episode 62 – Department of Labor $5.6 Million Judgment for Drivers Miscast as Independent Contractors – Feds Fed Up with Truckers Misclassification (February 3, 2023)
• Employee or Independent Contractor? Employers Who Misclassify Workers Put Themselves at Risk (September 16, 2022)

Tim Bowles
August 4, 2023